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Why are buyer-supplier relationships important and how to nurture them
September 11, 2019
The last couple of years many companies have realised why are buyer-supplier relationships important, and how nurturing these relationships is key for their long-term success. The importance of suppliers in an organization is especially evident in businesses relying on raw materials for their production.
Knowing that we come to one of the biggest challenges for SMEs – developing an effective and tailored buyer-supplier relationships program. Hence, understanding the buyer and supplier relationship hierarchy leads you one step closer to enjoying the benefits of vendor partnering to a supplier.
In essence, building a solid buyer-supplier relationship requires strong foundations.
What is a successful buyer supplier relationship built upon?
Regardless of what link you are in the supply chain, the principles which a buyer seller relationship is based upon are virtually the same. Yet, somehow, around 80% of B2B leaders have switched suppliers at least once in the past 2 years. These numbers show that the majority of relationships between buyers and sellers have issues which ultimately lead to breaking up the collaboration.
By having an open and effective two-way communication both sides will feel heard and understood. There’s no such issue that can’t be solved with a quick message, a call or even a lunch.
When both parties feel respected, more options are laid on the table and the chances to get to a mutually favourable agreement are bigger. In other words, if neither the buyer nor the supplier feels cornered, negotiations are likely to take a turn for the better and end up with higher profits for both parties.
The most important part of an excellent relationship is being open and honest about everything. It is imperative to be transparent and share all the information with each other. When both parties understand all circumstances future issues will be resolved quicker than when withholding important information.
Usually, a business relationship breaks down when one of the partners feels like they are not getting a fair deal. Therefore, both parties must split the benefits fairly. Non is superior over the other. In essence, both sides should profit while not harming financially the other.
Bonus tips for maintaining strong buyer seller relationships
Price : volume
If you’re a novice in B2B, your first instinct might be to seal the deal with as many buyers as possible. While this seems like a great strategy to increase your profits, the scenario is not very probable, at least not in the long run.
Studies have shown that sellers that have established solid, both-sided rapports with fewer buyers, actually turn better profits and have a steadier cash flow.
How does that work? At first, the buyer seller relationship is one-sided and not very favourable for the seller. They offer lower prices to the buyer with the purpose to bait higher volumes which usually doesn’t happen at the beginning. However, after a while, the buyer recognises the value they get and increase the volume. The relationships become two-sided.
Be careful, the value the buyer is supposed to get does not include only product quality. Negotiating skills must be put to good work alongside with truthful effort to nourish the relationship. This is where we arrive at the next point which we’ll elaborate on in the paragraph below.
The service-over-sales approach
The reason why most buyers change suppliers is because their needs are often unheard. In other words, sellers don’t pay attention.
The first and foremost lesson coming out of this is: put the focus on the service, not on the sale. Listen carefully to what the buyer is saying and always tend to find a common ground. It’s important to remember that both sides should be satisfied with the outcome.
Combine technology with human efforts to create a seamless experience for your customers. Nonetheless, never make the mistake to dwell entirely on tech. Where AI and ML fail, real humans excel. Find the right balance between these two and remember that a buyer seller relationship is as strong as the effort put into it.
How to find new buyers or suppliers?
Easily, be present on the B2B platform Enterprise League.
Enterprise League can be of great help when it comes to succeeding in building strong buyer supplier relationships. On one side, you can publish business tenders and receive companies’ bids. While on the other side, you can share your offerings and get contacted for prospective collaborations. The entire platform functions on AI working in the back, facilitating the B2B collaborative process.
More must-read stories from Enterprise League:
- The golden rules you need to build a steady buyer-seller relationship.
- Women entrepreneurs have secret superpowers! Find out what they are and how you can use them
- It’s time for you to master virtual business negotiations. Simply follow these easy tips.
- Key business advice from cancer surviving entrepreneurs and how they are winning business now.
- Learn how your business can survive a recession with this business guide. You should start applying it now.
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